Railway Budget’s 92-year-old journey comes to a halt

New Delhi: The historic decision of merging the Railway Budget with the General Budget for the first time since it began in 1924 was apparently done to stop politicisation of the sector. However, the government’s contention was dismissed by the Opposition parties and former railway ministers, who questioned the rationale behind the move.

Traditionally, the railway ministers had used the Budget to announce new trains to connect places which were seen to be politically important for the then government. The practice of announcing new trains was stopped last year itself with the government focusing on improving rail finances.

Finance minister Arun Jaitely began his Budget speech on Wednesday by listing the merging of the General and Railway Budget as one of the three major reforms in the Budget document this time.

“The merger of the Railways Budget with the General Budget is a historic step. We have discontinued the colonial practice prevalent since 1924. This decision brings the Railways to the centre stage of government’s fiscal policy and would facilitate multi-modal transport planning between Railways, highways and inland waterways,” Mr Jaitely said.   

Railway minister Suresh Prabhu also said that it was just a “colonial practice” and no other country in the world had a separate Budget for the Railways.

“Railways’ functional autonomy will continue. It was legacy and nowhere Railways has a separate Budget. Now there will be an integrated approach to transportation, including rail, road, aviation and waterways.”

Mr Prabhu said the Railways will no longer pay dividends to the finance ministry after the merger and is thus likely to save Rs 9,500 crore.

Both the ministers highlighted the fact that the Railways would benefit from the merger and the decision will give a boost to the overall infrastructure sector.

A record plan outlay of Rs 1.31 lakh crore was announced against Rs 1.21 lakh crore planned for 2016-17.

The finance ministry will provide a gross budgetary support of Rs 55,000 crore to the railways in 2017-18. For the first time after the merger of the budgets, the railways will not be required to pay annual dividend of around Rs 9,000 crore to the finance ministry beginning 2017-18.

However, former railway ministers questioned the rationale behind the move arguing that it was the only means available to help the common man.

West Bengal chief minister and former railway minister Mamata Banerjee said: “The grand design to merge the Railway Budget with General Budget turned out to be a damp squib. This will damage the very core of the transport system”.

Former railway minister Lalu Prasad was particularly harsh on merger of Railway Budget with the General Budget.

“They have demolished the tradition of presentation of separate Rail Budget since Independence... What is the rationale of continuing with a Railway minister when he cannot present the budget of his ministry,” he said.

Both the leaders had during their time as railway minister announced a slew of trains to cater to their constituencies.